CONTENTS
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Trang 34.7 MARKETING AND SALES SUB-PLAN LG SH HT TT TT KT HT KH TH 17
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Trang 41 INTRODUCTION
The Business Plan is a useful and versatile tool It is a guide that can also be described as the
businessman's best friend In today’s global and highly competitive business environment, enterprises, whether large or small, cannot hope to compete and grow without proper planning
1.1 Why Do You NEED A BUSINESS PLAN?
You may need a Business Plan for a number of reasons Here are the most important:
e lf you are starting a new project or venture
e lf you are looking for a business partner
e lf you require finance, government or EU grants and incentives
e To manage your business better
e To measure actual performance compared to what was planned
1.2 WHAT CAN A BUSINESS PLAN DO FOR You?
A good Business Plan can be useful to you In a number of ways It can:
e Help highlight aspects of the business that need special consideration
e Help identify your core competencies [what you can do best) and weaknesses
e Help identify weaknesses and threats to the business
e Open your eyes to new opportunities
e Help you understand your competitors
e Help you plan your operational setup better
e Help you use your financial resources more efficiently and ultimately more profitably
e Assist your management capabilities in relation to specific tasks and functions as well as bring
awareness to human resources and capacity needs
1.3 HOW WILL THIS HANDBOOK HELP YOU?
This Handbook is intended to answer the following basic questions In a simple and practical manner:
e What is a Business Plan?
e How does It help you to achieve your goals?
e What are the thinking processes you have to go through?
e What value does it have for you as a manager or as an entrepreneur starting up a new business?
e How is it prepared?
1.4 THE BUSINESS PLAN BELONGS TO YOU
Remember, nobody knows your business as well as you do Knowing what you are capable of, and where
you want to be in the future, is the essence of a good Business Plan With these two points in mind, all you
Trang 52 THE MALTA ENTERPRISE BUSINESS PLANNING PHILOSOPHY
Business Planning is fundamental to Malta Enterprise’s mission in assisting Maltese enterprises to start up, restructure and grow to become more competitive In line with Malta’s economic policy
Before we proceed to explain what a business plan is, it would be useful to eliminate some common misconceptions and explain what a business plan is not
2.1 WHAT A BUSINESS PLAN IS NOT
Contrary to what some may think, a business plan Is not:
e Aset of financial projections
e Anapplication for financial assistance
e A guaranteed formula for success
2.2 WHAT A BUSINESS PLAN IS
Malta Enterprise sees the Business Plan as a thinking process performed by the enterprise for the enterprise itself Every start-up enterprise needs to go through a thorough thinking process In order to come up with viable options and strategies that will strengthen its present position and facilitate its future development Finally, the thinking process should culminate in a set of measures for the implementation of these strategies This implementation plan is generally referred to as the milestone schedule
2.3 IDENTIFYING YOUR NEEDS
The milestone schedule referred to in 2.2 above should form both the starting and concluding point of your planning process In the first instance, well before you start writing the plan, you should make a list of all the things that you could possibly need in order to make your business a success
Once you have gone through the business planning process you will be In a much better position to identify and prioritize your needs in line with the realities of your business venture
2.4 THE THINKING PROCESS
Trang 6A good thinking process should lead to good Business Planning where sensible decisions are based on reliable information and not on ‘gut feeling’ This handbook is intended to guide you through your thinking process In a structured manner putting all the issues that you need to consider in a logical order
Often, the cause of failure is that entrepreneurs do not anticipate simple factors that could easily have been foreseen had they taken the time and trouble to go through a logical thinking process The process of
formulating a business plan helps scrutinize, in a formal way, basic matters that need clarification, such
as:
e Gut feelings and ideas
e Assumptions that have not been verified
e Calculations made without full knowledge of underlying principles e.g tax rates and bank interest
charges
e Regulations and legislation that could affect you
e External dynamics such as political changes and new technology that could have implications for
your business
Trang 73 THE BUSINESS PLAN FORMAT
In reality there is no standard format for the presentation of a good business plan Business plans vary in content and size according to the nature and size of the business concerned and on the emphasis that Is placed on certain critical areas as opposed to others
3.1 THE CONTENTS
Every business plan should address a number of fundamental issues without which it would not be
complete These issues can be grouped under six major areas that are the pillars of every business activity whether large or small The six major areas are:
e Sales and Marketing e Operations e Human resources e Finance e Technology and ITC e Management Information 3.2 USEFUL POINTS
Table A lists the important elements of a business plan and offers some simple points that need to be taken into consideration in regard to each section It is worth noting that these points are by no means exhaustive and are meant to serve only as examples The table is intended to provide you with a simple framework/format upon which to base your business plan
3.3 A SIMPLE FORMAT
The format provides you with a framework for presenting your thoughts, ideas and strategies
in a logical, consistent and coherent manner In other words the business plan format helps you to clarify your own ideas and present them clearly to others
3.4 TABLE A - ESSENTIAL CONTENTS OF A BUSINESS PLAN
The various sections are explained in detail in section 4 of this manual
CONTENTS USEFUL POINTS
1 EXECUTIVE SUMMARY ¢ Highlight the attractions of your business
¢ Show that your plan is well researched with
This section is a brief overview of the whole
figures to back up your forecasts Business Plan
¢ Demonstrate your management ability
¢ Show that your product has a market
2_ENTERPRISE DESCRIPTION ¢ Provide an overview of your business idea
Trang 8business
¢ Show any personal skills and/or experience that
will help you in your business
¢ State why you believe the business will be a
success
¢ Describe your range of products or services
¢ Mention plans for new additions to your range
¢ Speak about innovative ideas
¢ What value would the clients place on your
products?
¢ What will your clients expect from your
product?
¢ Example: Quality, Design, Reliability, Innovation,
Reasonable Price, Customer Care
¢ How big is your sector?
¢ How many companies operate this sector?
¢ Whatare the general trends?
¢ How is your industry changing?
¢ How will these changes affect you?
¢ Are you aware of legislation and/or regulations
that could affect your business?
¢ Have you thought about any other changes -
political, economical or technological - that could affect your business?
¢ Who are your competitors?(local and foreign)
¢ Whatare their strengths and weaknesses?
¢ How can you be different?
¢ How can you become more competitive?
INTERNAL
Trang 9¢ What are your weaknesses? EXTERNAL
¢ Whatare the opportunities?
¢ Whatare the threats?
* ls the market STATIC, GROWING) or
DECLINING?
¢ What market segment/s do you wish to operate
in?
¢ Who are your target clients?
¢ Do you have niche or mass market products?
¢ What is your pricing policy?
¢ How do you compare with the competition?
¢ How do you intend to sell your product?
¢ Where do you Intend to sell your product?
¢ How strong are your management systems? * general management * marketing management ¢ financial management ¢ How will you ensure an efficient production system?
¢ Have you thought about quality certification?
¢ How important are health & safety standards
for your product?
¢ Do you intend to invest in product development?
¢ Will you invest in new or second hand
equipment?
¢ Has consideration been given to whether the
equipment is manufactured in the EU or non EU?
Trang 10¢ What technical skills will your employees have?
¢ Do you need to invest in training?
¢ How will you motivate your workforce?
¢ How will you monitor their performance?
¢ How will you go about setting up the budget?
¢ How often will you review actual performance
against budget?
¢ How will you carry out the task of looking into
the reasons for the variances and taking corrective action?
¢ On what basis will you set the ROI that you wish
the business to give you?
¢ How will you keep control of your cash flow?
¢ How will you finance the changes you may need
to make in your business?
Trang 11Keep management accounts and produce them with regular frequency
Will you provide the resource to develop the contents of the management accounts to provide quality information, both within the business and with external information that would best assist and support management to do their job efficiently?
As a result of the analysis carried out in the preceding sections make a list of the critical measures you need to carry out Example:
+ +
Look into energy savings efficiencies on machinery
Apply for ISO certification
Invest in training for management Invest in training for employees Employ new staff
Carry out market research
Invest in Information Technology Systems Seek new premises
Seek foreign partners
Look for new market segments Others
Once you have identified the critical measures, you should plan their implementation
List all the important critical measures
List the time frames for the implementation of each critical measure
Estimate the cost of implementation of each critical measure
Trang 123.5 KEEPING IT SIMPLE
The Malta Enterprise Business Plan format is simple and easy to follow It is designed as a guide to help you understand your business better It helps you to analyse your strengths and weaknesses, and makes you think about your goals It also helps you to develop the right strategies In order to achieve your goals
Remember:
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4 THE BUSINESS PLAN
Business planning can be a highly beneficial exercise for the entrepreneur In order to derive the desired benefits from business planning It is important to take full ownership of the process, and make it your own from beginning to end While this does not mean that you should not seek professional advice when
needed, you should be careful, not to commit the common mistake of asking others to write the plan for
you or being influenced by unqualified opinions even if well intentioned
4.1 EXECUTIVE SUMMARY
The Executive Summary is a brief overview of the whole business plan Here are some simple hints to help
you build your Executive Summary:
Description of Business: Provide some information about the product or service you wish to offer The Market: What markets do you intend to target?
Growth Potential: What is the potential for your business? (What do you hope to achieve in one to
three years’ time?)
Sales & Profit Forecast: Give a summary of the sales and profit forecast figures (for the next three
years)
Financial Requirements: How much money would you require:
o To start the business
o To sustain your business during the first three years
Utilisation of Finances: What will the loan/overdraft/investment be used for?
Where will you source your funding from: Loan, Bank Overdraft, Personal funds ?
Repayment of Loans: How long do you expect the loan repayment period to be?
List of Critical Issues for the Success of the Project: Present a list of the critical success factors most likely to affect your project
Trang 144.2 ENTERPRISE DESCRIPTION
Here are some simple hints to help you in this section:
e Provide an overview of your business Idea
e What inspired you to choose this line of business?
e What personal qualities and experience will you invest in the business?
In what way Is your concept innovative? What are you offering that other businesses do not offer already?
e Do you believe there is a real need for your product or service?
e Where do you see your business in the medium and long term?
Remember:
4.3 PRODUCT OR SERV1CE DESCRIPTION
Here are some simple hints to help you in this section:
e Provide a detailed description of your product or service
e What innovative features does your product or service offer?
How does your product or service distinguish itself from other products or services already existing on the market?
e Can you list three unique selling points offered by your product or service?
e How will your product or service satisfy client needs and expectations?
Remember:
Trang 15
4.4 INDUSTRY ANALYSIS
Here are some simple hints to help you in this section: How big is the sector you will be operating in? How many companies already operate in this sector?
What are the general sector trends? Is it growing, static or slowing down? Can you perceive any important changes in this sector?
How can these changes affect your business?
Are you aware of any political, regulatory, social, environmental or technological changes that could seriously affect your business in the medium or long term?
How desirable do you consider this sector to be for new, local entrants and from other EU areas?
Remember:
4.5 COMPETITION ANALYSIS
Here are some simple hints to help you in this section: Who are your most important competitors? What are their main strengths and weaknesses? How can you be different?
How can your product or service be more competitive?
What are your competitors’ pricing policies? How do these affect your sales strategies? Can you list your main competitors and their estimated market share?
Example:
COMPETITORS MARKET SHARE %
Trang 16In order to compete successfully in business It is important for you to know about your competitors, their strengths and their weaknesses and to learn from these
observations You also need to be aware of failures so that you can avoid committing the same errors
WEAKNESSES
Given the necessary resources, which areas of your business would you need to improve? Example: e =Lack of funds e Lack of management skills e Unskilled workforce THREATS
Think about possible factors which could adversely affect your business in the future
Example:
e Imported products
e New entrants
e Political /Economic changes
e The SWOT analysis is a very important element of your Business Plan It
enables you to look at your internal strengths and weaknesses and at your external opportunities and threats
e = It is sufficient if you list these in point form; but it would be helpful for you if you could analyze each point in further detail
Trang 174.7 MARKETING AND SALES SUB-PLAN
The following questions are designed to guide your thinking and planning process 4.7.1
4.7.3
THE PRODUCT OR SERVICE [WHAT YOU WANT TO SELL]
List three important features that make your product or service worth having Example: design, functionality, reliability
List three features where you think your product or service could be improved
Can you list three major competitors that offer similar products or services to yours? Can you identify differences between your product and theirs?
In what aspects can your product or service be described as innovative? What image do you want to project with your product or service?
Do you have any plans to add more products or services to your current portfolio?
Remember:
THE CUSTOMER (WHOM YOU WISH TO SELL TO)
Will your business depend on one main customer or will you sell to a wide variety of customers? If you plan to sell to a wide variety of customers, list five types of customers that are likely to buy your product or service
Do you plan to have a uniform approach to all customer groups or will you vary your strategies accordingly?
What measures will you employ to identify customer requirements with regard to your product or service?
How do you plan to collect customer feedback in order to ensure that your product or service has a high degree of customer satisfaction?
THE PLACE (WHERE YOU SELL YOUR PRODUCT)
Where do you plan to sell your product or service? o Directly from the factory
o Froma showroom
o E-Commerce
o Other (give details)
Trang 18e How easy will it be for your customers to gain access to your products or services? Give details
e §6|lf you feel that customers will find it difficult to access your products, can you suggest ways of
improving the situation?
e Mention three ways in which your competitors facilitate access to their products or services for
their customers
e How do you plan to get the product to the market?
Distribute the product yourself? Employ full/part-time salesmen?
Enter into a distribution agreement with third parties? Oo 0 0 0 Online sales
4.7.4 THE METHOD (HOW YOU ADVERTISE AND SELL YOUR PRODUCT)
e What methods of advertising do you intend to use for your product or service?
o Newspapers and magazines Television Radio Sponsorships Internet (websites, e-newsletters, search engine optimization) © 0 0 0 0
Other (please specify]
e lf you intend to use any of the media mentioned above, which do you rate as the most effective and
why?
e How do your competitors advertise their products? Do you think their methods are effective?
e How will you price your products? Explain the reasons behind your pricing strategies
e How will your prices compare with those of your competitors?
e Do you intend to give your customers credit? Explain the reasons behind your decision
4.8 OPERATIONS SUB-PLAN
Here are some simple hints to help you in this section:
Trang 19How long and how well will the present premises [if any) meet your business needs? Are the business premises you have identified easily accessible to your clients?
Give details of equipment/machinery/vehicles you will require to operate your business Example:
Item and Purpose:
Current Value/Current Cost: Replacement Date: e Give details of equipment/other items which you plan to acquire or lease in the near future Example: Item and Purpose: Cost of Purchase/Rental: Supplier Credit Term in Days: Remember:
e Make upa list of your main suppliers and their credit terms Example:
Suppliers Credit Terms
19
Trang 20e Have you thought of other suppliers in case of emergencies?
e Do you intend to operate a quality management system of any sort? Are you planning to apply for
quality certification?
o What type of quality system?
o Who will take charge of implementing it?
o What are the timings for its introduction?
e How conscious are you of Health and Safety and/or Environmental regulations in your business?
4.9 HUMAN RESOURCES SUB-PLAN
Here are some simple hints to help you in this section:
e Describe your Management Structure (If you do not have a management structure, list those
people who can assist you with the running of the business]
e How many people do you plan to employ? (Full Time / Part Time]
e What types of skills and/or experience are you looking for?
e What training will your work force require to be able to meet your future plans?
e What measures do you plan to adopt to ensure employee loyalty?
e How soon do you think you will need to expand your work force?
e Have you thought of your own development and that of your management team as your business
continues to expand? Do you believe this is necessary?
Remember:
Trang 21
4.10 FINANCIAL SUB-PLAN
Here are some simple hints to help you in this section:
e What is the break-even point of your business? How soon can you reach it?
NOTE: To calculate the break- even point for the whole business or for each product or service, you will need to fully understand the costs of the business There are two main groups of costs:
o Direct Costs are generally straight forward to identify as they relate specifically to a product:
e.g labour, material and shipping costs
o Indirect costs, for example rent and service charges, will need to be included in the general
overheads and a proportion of those general overheads will need to be added to the cost of each product to arrive at its true cost The principle is that overheads also need to be covered and therefore “the overhead recoupment cost” is an important financial that needs to be kept up to date to make sure that your sales prices cover all the costs of running the business
Give amount of overdraft / funds needed as shown in cash flow forecast
Can you offer any security to support your financial requirements?
Over what period will loan/overdraft be repaid and are these repayments included in the cash flow forecast?
How much do you and your partners plan to invest in the business?
e Do you have access to other sources of funds? Give details if any
Trang 224.11 SELECTED OPTIONS AND CRITICAL MEASURES
Now that you have carried out a systematic analysis of your project, you should be in a position to look at your options in a more formal manner If you have doubts as to how to proceed at this stage, do not worry, this is a natural part of the process In fact it is considered a very healthy thing to have doubts after having gone through a thorough thinking process about your project
This is the time when you should consider your options very carefully and seek advice before you jump in at the deep end Once you have considered your options, you should be in a position to draw up a list of critical measures you need to implement in order to launch your project These measures should also indicate what kind of assistance [technical and financial) you require to get started
4.12 MILESTONE SCHEDULE
In the beginning of this manual, you were advised to make a list of all the things that you think would make your business a success, including any ideas that may seem far-fetched These should form the basis of your Business Planning Process
At this stage, after having gone through the Business Planning Process, you should be in a much better position to identify and prioritize your needs in line with the realities of your business venture
Once you have identified the critical measures, you should plan their implementation over a three year period Base your decisions on the information provided by your Business Plan When implemented, the critical measures In the milestone schedule will help your enterprise become more competitive
The table below is an example of what information could be included in a Milestone Schedule The information given within is by no means exhaustive and it is only meant to serve as an example It is important however to:
e State the type of assistance required (critical measures mentioned above]
e State the date of implementation of these measures
e State the cost of implementing such measures
Remember:
Trang 23
Milestone Schedule (Example)
ASSISTANCE REQUIRED DATE OF IMPLEMENTATION OPERATIONS ISO Certification Health & Safety Standards IT Systems Payroll System New Machinery HUMAN RESOURCES Consuttancy Employ New Staff Management Training Overseas Training EXPORT MARKETING Market Survey
Enhance Product for Export Promote Product [Abroad]